Aphria Stock Drops After Securing $80 Million in Financing

Aphria stock

Aphria stock is starting the week in the red after Aphria Inc (TSX:APHA) (NYSE:APHA) announced that it had secured a credit facility of $80 million CAD for its Aphria Diamond cultivation facility.

Prolonged Waiting Period

Earlier last month, Aphria announced that it had received a cultivation license from Health Canada for its Aphria Diamond facility after an extensive waiting period, bringing its total production capacity to 255,000 kilograms. Having initially submitted its licensing application for the facility in March 2018, first sales from the plant were expected in January of this year before a change in Health Canada regulations delayed the launch. Aphria stock is currently trading for $6.15 in Toronto.

"We are pleased to have secured a term loan that will repatriate a portion of our investment in Aphria Diamond, to be strategically deployed by Aphria. This loan strengthens our balance sheet without being dilutive, and positions Aphria Diamond for success as we expand into new categories and growth opportunities in cannabis to enhance value for shareholders long term," said CEO Irwin Simon. The first dried flower sales from the facility are expected in March 2020, with Aphria shares currently down about 2.5%.

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Aphria Stock Well-Placed Ahead of 2.0 Market

Despite the declining value of Aphria shares today, many analysts still believe it could be one of the best pot stock plays for 2020 once the cannabis 2.0 market launches. In today's statement, the company pointed to the fact it has the "largest cash balance in the cannabis industry without the dilution of a strategic partner," which means the company is well-capitalized to take advantage of the high margin products that are set to rocket in popularity in the coming months.

Added to this, Aphria Inc was one of the few pot firms to post a profit in the first year of legalization. While Aphria stock may have reached its bottom in mid-November, it is up over 20% in the weeks since, so it looks to be gaining momentum heading into the new year.

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